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Muñoz proposed making Spain a destination for Bitcoin miners.
Spanish Deputy Maria Muñoz in a letter to Congress has asked the country to position itself to take advantage of the Bitcoin mining situation in Kazakhstan following the internet shutdown by the Kazakhstan government.
The Bitcoin Mining Situation in Kazakhstan
In the aftermath of protests that rocked the nation because of the energy crisis, the government of Kazakhstan shut down the internet to manage the worsening situation. Consequently, many internet-dependent activities and companies were affected, including bitcoin mining. Estimates suggest the bitcoin hash rate tumbled by about 13% because of the decision.
Recall that after the crackdown on bitcoin and mining-related activities in China in 2021, Bitcoin mining crashed. This caused the number of miners in Kazakhstan to grow. A report by Cambridge Centre for Alternative Finance suggests that Kazakhstan is now the second-largest Bitcoin miner worldwide and contributed about 20% of the total bitcoin hash rate in the second half of 2021.
The internet shutdown means these miners will seek alternatives and Spanish Deputy Munoz believes that Spain can be the place the fleeing miners turn to.
What the Spanish MP Proposed
Muñoz proposed making Spain a destination for the miners in a tweet on her account on Friday. She followed this with a two-page open letter to the Spanish Congress.
In the letter, she sought to understand what information the Spanish government has about the development in Kazakhstan and its impact on mining operations in Spain. She also asked about measures the government was taking to attract the fleeing miners. Lastly, she requested “data about the energy efficiency of bitcoin and the growth of the mining sector.”
Muñoz’s party, Ciudadanos, has previously shown support for cryptocurrencies. In October 2021, the party proposed a national strategy on cryptocurrencies. The party believes that Spain can become the hub of crypto investments in the European Union. Bitcoin mining could be the catalyst to actualize that.
However, the open letter by Muñoz has attracted ridicule from a rival party member, Ernest Urtasun, of the Green party. Urtasun called the proposition a poor joke citing the challenges of Bitcoin mining on the environment. He also noted that cryptocurrencies remain an unstable and unregulated financial activity.
Another user mocked the proposal noting that the Bitcoin mining in Kazakhstan was partly responsible for the rise in electricity consumption and rates which led to the protests. The user noted that bringing the same to Spain was a crude joke.
However, in any case, Muñoz and her party have their work cut out for them if the proposal is to be accepted.